Housing Study – Tanzania
Tanzania suffers from a terrible shortage of good quality and affordable housing. So dire is this shortage that the nation currently carries a 3 million housing deficit coupled with a 200,000 unit annual demand. Over seventy percent of its urban residents live in unplanned and unserviced informal settlements. Only 15 percent of household in Tanzania have electricity, with a very large disparity between urban and rural households in Mainland Tanzania (45 percent and 3 percent respectively). Two in three households in Tanzania (67 percent) live in dwelling with earth, sand or dung flooring. Cement flooring only accounts for 30 percent of households. With an ever increasing urban population, 5.7 percent to 22.6 percent over the period 1967-2002, based on 2002 census data, it is inevitable that this shortage, which is compounded by lack of long-term housing finance and a lack of a formal residential housing construction sector, needs to be addressed in a timely manner. Over 80 percent of urban residents are tenants, living under a pro-landlord legislation that forces people to pay annual rent upfront in the wake of a limited supply of good houses and ever increasing cost of living. That’s the bad news!
The good news is Tanzania continues to rise from a centrally planned economy into a market driven economy registering on average above 6 percent growth consistently over the past five years. The Government through the Bank of Tanzania has began the process of initiating the Housing Finance Project (HFP) that will see the development of a vibrant mortgage market accompanied by housing microfinance instruments that will allow the markets to cater for different segments of income distribution. Steps have already been made towards paving the way through legislation that support the planned initiatives with the passing of the Mortgage Finance (Special Provisions) Act 2008 that brought about key changes to Chapter X of the Land (Amendment) Act 2004 the principal legislation that oversees the governance of mortgages. Duly supporting this move is the passing of the Unit Titles Act 2008, that effectively brought into existence the Condominium law for managing sectional properties etc. Deepening reforms towards better financial services are being carried out primarily through the National Strategy for Growth and Reduction of Poverty (NSGRP) or MKUKUTA to ensure security of tenure for land and property.